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Analysis: Another year, another budget shortfall

Last Modified: Sunday, November 25, 2012 6:32 PM

BATON ROUGE (AP) — In case Louisiana
lawmakers needed a little sobering news to go with their Thanksgiving
meals, their pre-holiday
budget meeting gave them a snapshot of next year's financial
problems.

As usual, the budget gap's a doozy, standing at nearly $1 billion.

This time around, however, lawmakers received the figure in a subdued manner, calmly absorbing the number, offering a few
suggestions and moving on to the next topic.

At some point, they had to get used to the big, bad news. They've been slammed repeatedly in recent years with hefty budget
gaps and deficits. Some they helped create through giant tax breaks, while others rolled in with the national recession.

Gov. Bobby Jindal's budget advisers told lawmakers the state faces a $963 million gap between state government's projected
income and the costs to continue all its existing programs and services and account for inflationary growth in the 2013-14
budget year that begins July 1.

This year's budget stands at $25 billion.

By comparison to other years, the latest budget shortfall could probably be seen as an improvement, at least slightly.

Before lawmakers and the governor's office
started crafting the 2009-10 budget, they faced a $1.7 billion
shortfall. For the
2010-11 budget, it was a $1.1 billion gap. A year later, it was a
$1.6 billion hole. When they started working on this year's
budget, they started with a nearly $900 million shortfall.

The $963 million hole falls on the better end of the spectrum in the context of the last five years.

That's probably little consolation to
lawmakers looking at what is likely to be new rounds of budget slashing
to health care
services for the poor, uninsured, disabled and elderly and to
public colleges that already have been stripped of $427 million
in state funding since 2008.

There are no easy cuts left to choose. Efficiencies and streamlining won't be enough to close the hole. And Jindal steadfastly
refuses tax hikes to fill the gap.

The governor must unveil his proposal for balancing next year's budget to lawmakers by Feb. 22.

Any new reductions will come as colleges are struggling to cope with what they've already lost.

Any new slashing also will hit as the LSU
health care system continues grappling with deep reductions this year
that have
shuttered services without any surety that the private health care
community will pick up those patients or the medical training
programs tied to them.

Lawmakers were aware the news would be grim before they received it.

At least one-quarter of the gap, about $250 million, involves the loss of one-time dollars that Jindal and lawmakers used
to pay for continuing programs, nearly all of it for health care services. Those dollars are expected to fall away in the
next fiscal year.

Barry Dusse, director of the governor's Office of Planning and Budget, said more than one-third of the gap, about $355 million,
was tied to a drop in federal Medicaid financing that also created a deficit this year after Congress made the cut.

Meanwhile, the cost of Louisiana's free
college scholarship program, called TOPS, will jump another $28 million
next year
on top of its $172 million current price tag, largely because of
continuing tuition increases approved by lawmakers to help
offset some of the state funding cuts to the schools.

To start addressing the hefty state budget
gap, Jindal and lawmakers likely will consider shaving off at least $164
million
of the shortfall by refusing to pay for inflationary increases,
merit raises and education funding boosts that they haven't
covered in recent years.

Senate Finance Committee Chairman Jack Donahue, R-Mandeville, said the state can't afford to pay for some of the inflationary
growth, like pay hikes for state employees and increased retirement costs.

"We're not going to be able to fund all those kinds of things," he said.

There's a lot more the state won't be able to afford next year either.